As per Rule 18 of Lokadalats rules = Where the award of Lokadalat is to be executed ? in pending case - the concerned court - in pre litigation stage case concerned district court = Sri S.M. Anjineyulu. Sri K. Satya Prakash and another. = Reported in http://judis.nic.in/judis_andhra/qrydispfree.aspx?filename=9720

Where the award of Lokadalat can be executed ?in pending case - the concerned court - in pre litigation stage case concerned district court ="Rule 18. Execution of awards passed by the Lok Adalats in respect of pending cases and prelitigation cases:-The awards passed by the Lok Adalats in respectof pending cases shall be executable by the Courts in which those matters werepending prior to the passing by the Lok Adalats.Provided that the awards passed by the Lok Adalats in respect of the matters atprelitigative stage shall be executable through the Court of District Judges ofthe District in which the Lok Adalats is held.(i) Necessary certificate for refund of Court Fee will be issued by the Courtwhich referred the case to the Lok Adalats to the person who is entitled forwhich refund of Court Fee.(ii) On production of such certificate, the District Collector or the competentRevenue Authority shall refund the amount of Court Fee in the manner provided inthe Andhra Pradesh Court Fees and Suits Valuation Act, 1956". There is no facility of obtaining any precept of a decree passed by the LokAdalat. This is particularly so, when Section 22-D of the Act has completelyexcluded the provisions of C.P.C. Knowing fully well that the award passed in apre-litigating stage can be executed only through a Court of District Judge ofthe concerned District, the petitioner presented the E.P., before a Court atMadanapally. The whole exercise is fraudulent. If one looks into theprovision, carefully, it suggests that pre-litigation cases can be institutedonly before a Lok Adalat, within whose jurisdiction,the property to be sold, is situated.The C.R.P is accordingly dismissed. The Member Secretary, A.P. State Legal Services Authority, Hyderabad, shall require all the Secretaries of theconcerned District Legal Services Authorities and the Permanent Lok Adalats toensure that the mechanism of Lok Adalats is not utilized as a device, to commit fraud on others. This Courtalso warns that any such instances, on the part of the concerned judicialofficers, handing such organizations, will be taken serious note of.There shall be no order as to costs.

THE HONOURABLE SRI JUSTICE L.NARASIMHA REDDY

C.R.P. No.4801 of 2011

19-02-2013

Sri S.M. Anjineyulu.

Sri K. Satya Prakash and another.

Counsel for the petitioner : Sri Bethi Venkateshwarlu

Counsel for the Respondents :

<GIST:

>HEAD NOTE:

?Cases referred

ORDER:

Till the year 1980, the adjudicatory process in India has been purely
conventional. The only alternative to adjudication through Courts was
arbitration. In the year 1980, a Committee for Implementing Legal Aid Schemes
was appointed and through the auspices of the same, an informal adjudication, by
conducting what are known as Lok Adalats, was evolved. The Parliament enacted
the Legal Services Authorities Act, 1987 (for short 'the Act') with a view to
provide statutory backing to the administration of justice through Lok Adalats.
Further improvements thereto were made through Act 37/2002. One of the salient
features was the addition of Chapter-VI-A, which provided for the mechanism of
Pre-Litigation Conciliation and Settlement. Section 22-C of the Act confers
right upon any party to a dispute, to make an application to the Permanent Lok
Adalat for settlement, before the dispute is brought to any Court of law.

The petitioner herein filed Pre-Litigation Case No.40 of 2008 before the Lok
Adalat Bench, City Civil Court Legal Services Authority, Hyderabad (for short
'the Lok Adalat'), against respondents 1 and 2. It was pleaded that the
respondents borrowed a sum of Rs.16,90,000/- from him, by executing six
promissory notes, with a promise to repay the same. It is stated that the
respondents also executed a deed of mortgage, offering a residential house
bearing No.8-241-A, of Ramachary Veedhi, Madanapally, as security for repayment,
but they are still due a sum of Rs.12,90,000/-, and prayed for a decree, for a
sum of Rs.21,68,800/-, inclusive of interest.

The Lok Adalat issued notice to the respondents and conciliation is said to have
been undertaken by the Secretary of the Legal Services Authority. On the basis
of an alleged compromise, said to have been arrived between the parties, an
Award was passed on 26-04-2008. The terms of compromise, as incorporated
in the award, are to the effect that the respondents have undertaken to pay the
amount, covered by six promissory notes, within six months after the sale of the
mortgaged property.
In addition to the amount of Rs.21,68,800/-, they were to pay interest at 6% per
annum on the principal amount of Rs.12,90,000/-.

Stating that the respondents did not honour the award passed by the Lok Adalat,
the petitioner filed an execution petition in the Court of II Additional
District Judge, Madanapally, mentioning that the mortgaged property is situated
within the jurisdiction of that Court. The E.P was returned through order dated
21-10-2010, observing that as per Rule 18 of the A.P. State Legal Services
Authority Rules, 1995 (for short 'the Rules'), the awards passed by the Lok
Adalats are executable by the Court of District Judge of the District, in which
the Lok Adalat is held, and it was left open to the petitioner to present it
before the proper forum. The petitioner challenges the said order.

Learned counsel for the petitioner submits that the view taken by the Court in
which the E.P. is presented is not correct.
He contends that once a decree is passed by a Lok Adalat,
it partakes the character of a decree passed by a regular Court of law and the
E.P. ought to have been entertained.

This revision provides an instance of the fraud being played on the Courts,
taking advantage of the facility, created under the Act. Unfortunately, such
instances are occurring frequently. Persons, who are professional litigants,
are taking recourse to the provisions of the Act, to get reliefs, which they are
sure, of not getting before the Courts of law. A device of providing relief to
parties, through an informal adjudication; is slowly turning out to be a tool in
the hands of unscrupulous persons.

The case of the petitioner is that the respondents borrowed a sum of
Rs.16,90,000/- from him, but have paid only Rs.4 lakhs.

For all practical purposes, the matter, which was otherwise to be adjudicated
before a Court of law; is brought before the Permanent Lok Adalat. Filing of
such a matter would preclude the parties from seeking adjudication before the
Court, that has jurisdiction in the matter.

Section 22-C of the Act, which provides for the mechanism, reads,
"Sec.22-C. Cognizance of cases by Permanent Lok Adalat.-

(1) Any party to a dispute may, before the dispute is brought before any
court, make an application to the Permanent Lok Adalat for the settlement
of dispute:
Provided that the Permanent Lok Adalat shall not have jurisdiction in
respect of any matter relating to an offence not compoundable under any law:
Provided further that the Permanent Lok Adalat shall also not have
jurisdiction in the matter where the value of the property in dispute
exceeds ten lakh rupees:
Provided also that the Central Government, may, by notification,
increase the limit of ten lakh rupees specified in the second proviso in
consultation with the Central Authority.
xxxx
xxxx

(8) Where the parties fail to reach at an agreement under sub-
section (7), the Permanent Lok Adalat shall, if the dispute does not relate
to any offence, decide the dispute.

Sec.22-D.Procedure of Permanent Lok Adalat.-
The Permanent Lok Adalat shall, while conducting conciliation
proceedings or deciding a dispute on merit under this Act, be guided by the
principles of natural justice, objectivity, fair play, equity and other
principles of justice, and shall not be bound by the Code of Civil
Procedure, 1908 (5 of 1908) and the Indian Evidence Act, 1872 (1 of
1872)".

The question, as to when the dispute can be said to have arisen; is too
difficult to be defined. If a given set of facts constitutes a cause of action
to file a suit, the question, as to whether a pre-litigation case can be
entertained by the Lok Adalat; is left open. There is nothing, which disables a
person from filing a pre-litigation case, instead of a suit. In such an event,
he will have the advantage of seeking adjudication without payment of the Court
fee. Sub-section (8) of Section 22-C of the Act confers power upon the Lok
Adalat to decide the dispute, even if the parties fail to reach at an agreement.
The only difference is that Section 22-D excludes the provisions of the C.P.C.,
in such adjudication. In fact,
it would be a total negation of the concept of adjudication, that is adopted for
the country. That, however, is a different aspect.

When the facts pleaded by the petitioner fit into an ordinary suit, for recovery
of money, it is not known as to what basis it is treated as a pre-litigation
case. The record does not disclose that the respondents have submitted any
written-statement, or representation. The Secretary of the City Civil Court
Legal Services Authority, Hyderabad, is said to have brought about a compromise.
If the respondents were so virtuous and good enough to pay the amount, it is not
known as to why they needed any decree or award. No document was marked, much
less any witness was examined.

The actual mischief, which the petitioner and the respondents wanted to play, is
evident from Clause (1) of the award. It reads:

"The respondents represent that they are liable to pay the loan amounts
mentioned at S.Nos.1 to 6 and they are liable to pay Rs.21,68,800/- to the
petitioner under the promissory notes dt.03.04.2005, 17.05.2005, 28.06.2005,
10.07.2005, 20.08.2005 and they will pay the said amount to the petitioner and
also the loan amount under the mortgage deed along with agreed interest within
six months after sale of the mortgaged house i.e. D.No.8-241-A, situated at
Court Ramachary Veedhi, Madanapally, Chittoor District".

A specific reference is made to a mortgage. In the body of the award, it was
mentioned that an item of property in Door
No.8-241-A, Ramachary Veedhi, Madanapally, purchased under a document
No.8650/2006 of Sub-Registrar, Madanapally was mortgaged by the 1st respondent,
under a document.
No particulars of the date of mortgage were mentioned . Clause (1) of the award
provides for payment of the agreed amount within six months, after the sale of
the mortgaged house.

The Permanent Lok Adalat is headed by an Officer of the rank of District Judge.
The sale of any item of a mortgaged property can take place only through a
preliminary decree, passed under Order XXXIV C.P.C, followed by a final decree.
The curious part of the matter is that in the E.P., it was mentioned that
respondents have 2/3rd share in the mortgaged property. It is not known as to
how such a mortgage was effected at all. That would have been possible, if only
the mortgage deed was made part of the record, and it was proved as required
under law. Further, when the property is situated in Madanapally, and
respondents
1 and 2 are residents of that place, one cannot understand as to
on what basis the petitioner had initiated proceedings before the Permanent Lok
Adalat at Hyderabad. The effort of the parties was only to get a decree at
Hyderabad; make the Court at Madanapally to sell the property not owned by them,
and appropriate the proceedings.
There is a clear collusion between the
petitioner, on the one hand, and respondents 2 and 3, on the other hand, to
defraud the absolute, or joint owners of the property, in D.No.8-241-A, of
Ramachary Veedhi, Madanapally.

Assuming that there is no illegality in the award passed by the Lok Adalat, the
petitioner could have enforced the same through execution in any Court at
Hyderabad. Rule 18 of the Rules read,

"Rule 18. Execution of awards passed by the Lok Adalats in respect of pending cases and prelitigation cases:-The awards passed by the Lok Adalats in respectof pending cases shall be executable by the Courts in which those matters werepending prior to the passing by the Lok Adalats.Provided that the awards passed by the Lok Adalats in respect of the matters atprelitigative stage shall be executable through the Court of District Judges ofthe District in which the Lok Adalats is held.(i) Necessary certificate for refund of Court Fee will be issued by the Courtwhich referred the case to the Lok Adalats to the person who is entitled forwhich refund of Court Fee.(ii) On production of such certificate, the District Collector or the competentRevenue Authority shall refund the amount of Court Fee in the manner provided inthe Andhra Pradesh Court Fees and Suits Valuation Act, 1956". There is no facility of obtaining any precept of a decree passed by the LokAdalat. This is particularly so, when Section 22-D of the Act has completelyexcluded the provisions of C.P.C. Knowing fully well that the award passed in apre-litigating stage can be executed only through a Court of District Judge ofthe concerned District, the petitioner presented the E.P., before a Court atMadanapally. The whole exercise is fraudulent. If one looks into theprovision, carefully, it suggests that pre-litigation cases can be institutedonly before a Lok Adalat, within whose jurisdiction,the property to be sold, is situated.The C.R.P is accordingly dismissed. The Member Secretary, A.P. State Legal Services Authority, Hyderabad, shall require all the Secretaries of theconcerned District Legal Services Authorities and the Permanent Lok Adalats toensure that the mechanism of Lok Adalats is not utilized as a device, to commit fraud on others. This Courtalso warns that any such instances, on the part of the concerned judicialofficers, handing such organizations, will be taken serious note of.There shall be no order as to costs.

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document …